How Do People Make Money on YouTube?

The most common ways people make money on videos uploaded to YouTube is through advertising and paid product placement.

Some people make money on YouTube through the ads that appear before their videos. YouTubers sign up for an AdSense account through Google, which tracks how many impressions a video gets. An impression is counted as any time the video is watched by a viewer for longer than 30 seconds. AdSense income is based on the number of impressions, which ads are shown during the video, and how many times the ads are clicked. Payments are sent when an AdSense account reaches $100.

Product Placement in Videos

Paid product placement is another way in which people can monetize YouTube content. Paid product placement occurs when a sponsor pays the YouTube content creator directly to review a product or to feature it within the video.

In general, the more people who watch a video, the more value it has to an advertiser or sponsor, and therefore the more revenue it is likely to generate for the content's creator. One of the most important priorities for people interested in profiting from YouTube content is to increase the size of their audience.

YouTube Best Practices

To increase their chance of attracting a large follower base, creators should follow established YouTube best practices. One of the most fundamental best practices is to create rich, engaging content. Viewers come to YouTube looking to either be entertained or for a solution to a problem they face. By creating great content, it's more likely the video gets viewed and shared. The more engagement a video receives, the more valuable it is to YouTube, increasing the chances it will rank higher within the search results.

Another way to increase viewership is for content creators to optimize their videos for YouTube search. This includes using the Google keyword planner to find words that a large quantity of people search for and to include those keywords within the description and tags of the YouTube video page. Promoting the YouTube video through the use of social media and paid media advertising is another popular way to generate additional traffic to the video.

Revenue Generation Challenges

Even when all these best practices are followed, there are some revenue generation challenges that YouTube video creators face. The average rate for pre-roll ads is much lower than the rate would be for a traditional media outlet such as CNN. In addition to the production costs a video creator might incur, YouTube also collects 45% of the advertising profits.

Despite these challenges, people who are able to attract a large and loyal following can make a substantial income on YouTube. According to Forbes, the highest-paid YouTube video creator for 2017 was Dan Middleton, a gamer who posts videos of himself playing Minecraft and other games. He earned $16.5 million in 2017. (For related reading, see: How to Make Money With YouTube.)